Eviews Analysis: Investigating the Relationship Tunneling Incentive, Leverage Ratio, and Hedging in Indonesian Stock Exchange-Listed Firms

Abstract

Manufacturing companies carry out many operational activities, so the more activities carried out, the more problems will be faced, especially problems related to the company's finances. So that the company experiences less than the maximum profit. For this reason, accurate financial management is needed to record and measure manufacturing company costs and profits so that the financial problems that occur in these manufacturing companies can be prevented or minimized through appropriate financial and operational controls. The method utilized in this study is a causal relationship. From the research results obtained using Eviews12 for manufacturing, Tunneling Incentives, Leverage, and Hedging can increase company value. It can also be concluded that Tunneling Incentive, as measured by Distributed Ownership Structure, has no significant effect on Leverage and Hedging. In contrast, Tunneling Incentive, as measured by Concentrated Ownership Structure, has a positive and significant effect on Leverage and Hedging. The managerial implications of this research are how important tunneling is for companies. The emergence of tunneling is due to agency problems between majority and minority shareholders. By holding tunneling by the controlling shareholder, there will be no dividend payment so that the controlling shareholder benefits the minority shareholder.